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Your company's weighted-average cost of capital is 11 percent.It is planning to undertake a project with an internal rate of 14%,but you believe this project
Your company's weighted-average cost of capital is 11 percent.It is planning to undertake a project with an internal rate of 14%,but you believe this project is not a wise investment. What logical arguments would you use to convince your boss to forego the project despite its high rate of return? is it possible that makin investments with returns higher than the firms's cost of capital will destroy value?if so, how?
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